ECOMMERCE IN ASEAN What can we do to accelerate growth? Max Bittner, CEO Indonesia Malaysia Philippines Singapore Thailand Vietnam Lazada Group overview Celebrating our 5th anniversary in March 2017 COMPANY OVERVIEW LAZADA PRESENCE • The leading online shopping and selling destination in Southeast China Lazada B2C Asia eCommerce market position • Widest footprint in the region HK / Shenzhen • Launched in 5 markets in March 2012: Indonesia, Malaysia, the Sourcing hub Philippines, Thailand and Vietnam • Launched in Singapore in May 2014 • Headquartered in Singapore #1 #1 Philippines Vietnam • One-stop shop to access ~39 million products, sourced locally Pop: 108m and internationally, across more than 15 categories #1 Thailand Pop: 93m Pop: 68m • Created an end-to-end ecosystem enabled by best-in-class logistics and payment capabilities #1 Malaysia • Backed by the world’s largest retail commerce company – Alibaba Pop: 30m Group Singapore • Acquired online supermarket RedMart in Singapore in Q4 2016 Pop: 6m Majority #1 Indonesia Pop: 254m investor Source: Company Information, IMF Database 2 Consumer demand is driving product choices Over 39 million products from more than 15 categories A wide assortment of products of about 39 million SKUs from more than 15 categories From electronics to lifestyle; a one-stop shop. Watches, Sunglasses Automotive & Gadgets Toys & Games Travel & Luggage & Jewellery TV, Audio/ Video Groceries Computers & Laptops Health & Beauty Gaming, Gadgets Sports & Outdoors Media, Music & Books Cameras Home & Living Baby & Toddler Fashion Mobiles & Tablets Home Appliances 3 What is behind an online marketplace? Connecting brands & sellers to 560 million Southeast Asia consumers Category Sample Partnerships Recent Partner and Press Quotes Electronics “Lazada is Samsung's strategic online partner to win in South East Asia across Smartphones, TV, Accessories and Home Appliances given their nationwide reach, diverse payment solutions and integration with Alibaba” (Samsung Electronics, President, South East Asia & Oceania) Home ‘With Robinson’s & Lazada partnership more & more Filipinos will enjoy Robinson’s Appliances through effortless + risk-free e-com” 2 ~55,000 "Unicharm sees e-com as key driver for growth in SEA for Mamy Active seller partners Poko. Lazada is our key partner as they provide nationwide free delivery & FMCG access to variety of payment options" (Unicharm CEO TH) (H&B, TKB) “E-commerce is changing the retail landscape, giving consumers 1,000+ unprecedented access to quality premium brands. In SEA, Lazada is our Brand partners strategic partner to jointly unlock the potential“ (L’Oreal) Fashion & “…While we continue to expand our b&m stores, Lazada will help us reach Accessories out to more consumers so they can enjoy hassle-free Penshoppe shopping wherever, whenever” (Penshoppe CEO) 4 Complex geography Need for sophisticated logistics network 112 ~ 5000 Last mile 14 Fleet size Fulfillment centers distribution hubs Almost 100% ~ 80 10 Geographic Coverage 3rd Party Logistics Sortation centers in 6 markets Partners Source: Company Information 5 Diverse markets need diverse payments Meeting customers’ needs for flexibility and convenience • Unsophisticated, with a significant of the payments through cash • Approximately 70% of residents do not have access to traditional banking services • Credit Card penetration in some markets is below 5% • To offer the best online shopping experience, Lazada offers multiple payment methods: • Cash on Delivery • Credit/Debit Card • Paypal/AMEX • MasterPass • HelloPay Source: Company Information, Mckinsey 6 eCommerce is booming in Southeast Asia, driven by consumers 7 50 million consumers haven’t purchased online yet Untapped eCommerce opportunities Research but do not purchase online ~50M Also purchase ~100M Source: Bain & Co, Temasek Holdings & Google 8 And a significant portion of consumers are on mobile A mobile-first market . The 6 markets in which Lazada operates in, enjoy more than 100% mobile penetration rate, higher than the global average Source: We are social, hootsuite, tech in asia (feb 2017) 9 Consumers are starving for international products Lazada Group crossborder Facilitating easier flow of goods into Southeast Asia One-stop solution for sellers to access six markets Superior logistics capabilities enable Chinese merchants to drop off their parcels at the LGS sortation center in Shenzhen 10.